In wheat, Funds, large specs and commercials are slightly long; small specs and farmers are carrying the shorts. This is normally a bullish configuration, but tells little about timing. Dec Wheat price action looks to have more downside. 790, 775 and 760 are the three most likely stopping places. Since we are now at 838, that is still a useful move. July wheat likes 690, 675 and 660. The basis difference looks pretty bullish for the fall.
Both commercials and funds are liquidating their positions, moving towards a neutral stance. July beans is in a meander but is slightly more bearish than bullish. November is much the same. I’m thinking 1250 "oughta" hold for November.
Corn CoTs show a noticeable reduction in longs by funds and in shorts by commercials, rather like beans but with further to go to reach neutral. July may have gone low enough or may need to go down to 650 to find a still point. Yes, lower is possible, just not expected. That would take December down to about 600.
Now we wait. How badly will production be hurt by the not-so-friendly weather we have already seen, and what is in store in the coming four months will determine prices. I haven’t heard the Chinese or the Russians crowing about the near-miracle recovery of their wheat fields. While it seems to us too early in the season to judge, spin (that’s the same as propaganda, right?) masters in those countries are often quick to overstate how wonderfully well they are doing.
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